1. Field of the Invention
The present invention relates generally to methods and apparatuses for processing sales. More particularly, the present invention relates to a method and apparatus for processing sales of multiple products at a single price based on sales performance data of the products.
2. Description of the Related Art
The retail industry often offers a group of products together at a single price. By way of example, fast food restaurants have been known to offer meals which include a hamburger, French fries and a soda at a single price which is less than the sum of the prices of the individual products. Alternatively, a product may be added, e.g., a complementary apple pie is provided with the purchase of a hamburger, French fries and a soda at their regular price. These meals are typically ordered from "order-by-number" or "package deal" menus, thereby providing the customer a convenient way to order multiple products. Often these products are so related that they are commonly purchased during a single transaction, making them ideal candidates for a packaged type offering. Moreover, the customer is encouraged (in effect rewarded) to purchase more than the customer may have initially intended. For example, a customer that may have intended only to purchase the hamburger and soda may respond to the promotion by purchasing the packaged meal that also includes French fries for a slightly higher price.
Other retailers commonly offer a plurality of products, which may be the same or different but are typically closely related, at a single price. For example, a clothing store may offer any two sweaters at a single price which is lower than the sum of the prices of the two sweaters individually. Alternatively, an additional product such as a fourth pair of socks may be offered for free to those who purchase three pairs of socks. These methods are typically employed in a "clearance" sale, e.g., at the end of a season. Clearance sales are usually only implemented when demand levels fall below a certain threshold at which the retailer decides that a sale is necessary to sell the surplus inventory. Since such decisions are not continuously decided in proportion to demand patterns, retailers miss an opportunity to optimize decisions as to such sales. The consumer's perceived value of the package allows the retailer to sell products that otherwise may not be sold. However, the purported value of a package offer may not be perceived accurately by consumers, since package pricing allows the retailer to disguise the price of the individual products in the package which may be discounted or inflated. Regardless, a customer is encouraged to purchase more than they may have initially intended.
Nevertheless, retailers are still faced with the problem of selling inventory that has become distressed. Retailers typically offer their distressed inventory at cost or even at a loss to make room for more profitable merchandise or to avoid a substantial loss in their investment. Inventory becomes distressed when the supply exceeds demand, such as when a product becomes unpopular at market. The risk of inventory becoming distressed increases with products that are perishable or that will expire. The closer products get to perishing or expiring, the less likely it becomes that the retailer will sell the product for a profit providing demand at least remains constant or diminishes. If the product expires before it is sold, the retailer will lose all revenue opportunities associated with that product.
Consequently, retailers frequently dispose of expired products they were unable to sell. By way of example, fast food restaurants generally throw out any prepared food that has not been sold by the time the restaurant closes. Also, unsold magazines and newspapers are disposed of when they expire.
In recent years, an economic theory known as "revenue management" has been proposed to solve inventory related problems. The theory states that markets are most efficient when prices are dynamically adjusted in proportion to supply and demand. The practice of revenue management has proven to be highly successful in the airline industry. More specifically, airlines use revenue management principles to optimize their profits on perishable inventory by selling seats at prices that vary in accordance with supply and demand. Furthermore, the grandparent application to the present invention, U.S. patent application Ser. No. 08/947,798 entitled "Method and Apparatus for Dynamically Managing Vending Machine Inventory Prices," filed Oct. 10, 1997, employs such revenue management concepts in vending machines. However, a need clearly exists to solve inventory problems in retail environments.